Friday, May 17, 2019

IGNOU: PCO-01 Solved Papers (Dec' 2017)


Bachelor's Preparatory Programme (B.P.P.)
(For Non 10+2)
Term-End Examination
December, 2017
PC0-01 : PREPARATORY COURSE IN COMMERCE
Time : 2 hours
Maximum Marks : 50
General Instructions :

Preparatory Course in Commerce (PC0-01) Questions 1— 50
1)      This is an objective type question paper. Options for the correct answer must be marked only in OMR sheet.
2)      All questions are compulsory.
3)      The question paper consists of 50 questions each of which carries one mark.
4)      Each question has four alternatives, one of which is correct. Write the Sl. No. of your correct alternative/answer below the corresponding question number in the OMR sheet and then mark the rectangle for the same number in that column. If you find that none of the given alternatives is correct then write 0 and mark in column 0.
5)      Do not waste time in reading the whole question paper. Go on solving questions one by one. You may come back to the left out questions, if you have time at the end.

1. The system of recording transactions based on dual aspect concept is called
1)         Double Entry System
2)         Single Entry System
3)         Double Account System
4)         Double Column System
2. The basic function of Financial Accounting is to
1)         find out the amount of capital only
2)         find out the amount of net profit only
3)         record both, credit and cash purchases
4)         record, classify and summarize the business transactions systematically



3. The balance of Cash Book is
1)         a liability
2)         an asset
3)         an income
4)         an expense
4. Purchase Book is meant for recording
1)         Credit purchases of goods
2)         Cash purchase of goods
3)         All types of purchases
4)         Both credit and cash purchases
5. Rent Outstanding Account is a
1)         Real A/c
2)         Nominal A/c
3)         Personal A/c
4)         Capital A/c
6. Which of the following will not be shown in a Balance Sheet?
1)         Contingent liability
2)         Prepaid insurance
3)         Advance payment of tax
4)         Long-term loan
7. Which of the following errors shall affect the Trial Balance?
1)         Error of principle
2)         Error of partial omission
3)         Compensatory errors
4)         Error of commission
8. Which account is used for rectification of one-sided errors ?
1)         Profit and Loss A/c
2)         Cash A/c
3)         Suspense A/c
4)         Trading A/c
9. 'Salaries and Wages' are shown in final accounts on the
1)         Debit side of Trading A/c
2)         Debit side of Manufacturing A/c
3)         Debit side of Profit and Loss A/c
4)         Debit side of Capital A/c
10. Manufacturing Account is prepared to find out
1)         Cost of Sales
2)         Gross Profit
3)         Net Profit
4)         Cost of Production
11. Purchases made on credit not recorded would affect
1)         Sales A/c
2)         Purchases A/c
3)         Supplier's A/c
4)         Both Purchases A/c and Supplier's A/c
12. Sale of goods to Arun should be credited to
1)         Sales A/c
2)         Cash A/c
3)         Arun's A/c
4)         Profit and Loss A/c
13. Returns Outward Book is kept to record
1)         Return of anything purchased
2)         Return of goods sold
3)         Return of goods purchased
4)         Credit purchases of goods
14. The balance of Petty Cash Book is
1)         An expense
2)         An income
3)         A liability
4)         An asset
15. Closing Stock is valued at
1)         Market price
2)         Cost price
3)         Cost price or market price whichever is higher
4)         Cost price or market price whichever is lower
16. In case of bad debts, which account should be credited?
1)         Debtor's A/c
2)         Cash A/c
3)         Bad debts A/c
4)         Profit and Loss A/c
17. Purchase of furniture is debited to
1)         Cash A/c
2)         Purchases A/c
3)         Furniture A/c
4)         Capital A/c
18. Which of the following accounts is not a personal account?
1)         Interest Outstanding A/c
2)         Loan A/c
3)         Drawings A/c
4)         Bad debts A/c
19. Double Entry System of book-keeping means
1)         Entry in two sets of books
2)         Entry at two places
3)         Entry for two aspects of a transaction
4)         Entry recorded twice on one side of an account
20. Bad debts recovered should be credited to
1)         Bad debts recovered A/c
2)         Bad debts A/c
3)         Cash A/c
4)         Debtor's A/c
21. Journal Proper is meant for recording
1)         Credit purchases of fixed assets
2)         Cash purchases of fixed assets
3)         Return of goods purchased
4)         Transactions for which no special journal is kept
22. Trial Balance is prepared in order to
1)         find out Gross Profit
2)         find out Net Profit
3)         find out the financial position of a business
4)         test the accuracy of posting and to prepare final accounts
23. Maintenance charges of a fixed asset is a
1)         Revenue expenditure
2)         Deferred revenue expenditure
3)         Capital expenditure
4)         Revenue loss
24. Contingent liability will appear
1)         in Trading A/c
2)         in Profit and Loss A/c
3)         in Balance Sheet
4)         outside the Balance Sheet as a footnote
25. All direct expenses are shown in
1)         Trading A/c
2)         Profit and Loss A/c
3)         Profit and Loss Appropriation A/c
4)         Drawings A/c
26. Profit on sale of an asset will be recorded in the
1)         Debit side of Trading A/c
2)         Credit side of Trading A/c
3)         Credit side of Profit and Loss Appropriation A/c
4)         Credit side of Profit and Loss A/c
27. A person who draws a Bill of Exchange is known as
1)         Endorser
2)         Drawer
3)         Drawee
4)         Payee
28. Which note is sent to the customer when he returns the goods to the seller?
1)         Debit Note
2)         Credit Note
3)         Cheque
4)         Promissory Note
29. Which of the following accounts shows a credit balance?
1)         Plant A/c
2)         Debtor A/c
3)         Rent Received A/c
4)         Wages A/c
30. The difference of Trial Balance is shown in
1)         Capital A/c
2)         Profit and Loss A/c
3)         Cash A/c
4)         Suspense A/c
31. Excess of expenditure over income is a
1)         Revenue loss
2)         Revenue profit
3)         Capital gain
4)         Capital loss
32. Interest on Drawings is shown on the
1)         Credit side of Profit and Loss A/c
2)         Credit side of Trading A/c
3)         Debit side of Trading A/c
4)         Debit side of Profit and Loss A/c
33. Which of the following equations is correct ?
1)         Assets = Capital — Liabilities
2)         Assets = Capital ± Liabilities
3)         Assets = Capital + Liabilities
4)         Assets = Capital x Liabilities
34. Cost of Goods Sold is equal to
1)         Sales + Gross Profit
2)         Sales — Gross Profit
3)         Sales x Gross Profit
4)         Sales ÷ Gross Profit
35. Real accounts reflect
1)         Liabilities
2)         Gains
3)         Assets
4)         Expenses
36. Goods given away as charity would be credited to
1)         Cash A/c
2)         Sales A/c
3)         Charity A/c
4)         Purchases A/c
37. Which of the following assets is not a current asset ?
1)         Patents
2)         Debtors
3)         Closing Stock
4)         Prepaid Expenses
38. 2,000 paid as wages for installation of a machine should be debited to
1)         Cash A/c
2)         Machine A/c
3)         Wages A/c
4)         None of the above
39. Copyrights are treated as
1)         Tangible assets
2)         Intangible assets
3)         Current assets
4)         Fictitious assets
40. Bank Reconciliation Statement is prepared by the
1)         Auditor of the Bank
2)         Creditors
3)         Bank
4)         Customers of the bank
41. Bank Overdraft is
1)         A tangible asset
2)         An intangible asset
3)         A current liability
4)         A long-term liability
42. Preliminary expenses are called
1)         Current liability
2)         Tangible asset
3)         Intangible asset
4)         Fictitious asset
43. Revenue is said to be realized when
1)         Goods are manufactured
2)         Cash is received
3)         Sales are made
4)         Goods are manufactured and sales are made
44. Underwriting Commission is an example of
1)         Deferred revenue expenditure
2)         Capital expenditure
3)         Revenue expenditure
4)         Revenue loss
45. Sales tax collected will be shown in
1)         Trading A/c
2)         Profit and Loss A/c
3)         Manufacturing A/c
4)         Liabilities side of the Balance Sheet
46. Donations received for general purpose is
1)         Capital receipts
2)         Revenue receipts
3)         Capital expenditure
4)         Deferred revenue expenditure
47. Which of the following is not a liquid asset ?
1)         Stock
2)         Cash in hand
3)         Cash at Bank
4)         Bills Receivable
48. Current liabilities do not include
1)         Creditors
2)         Bills Payable
3)         Bank Overdraft
4)         Prepaid Expenses
49. Interest Outstanding appearing in the Trial Balance will be shown in
1)         Trading A/c
2)         Manufacturing A/c
3)         Profit and Loss A/c
4)         Balance Sheet
50. Contra entry appears on both sides of the
1)         Sales Return Book
2)         Purchases Return Book
3)         Cash Book
4)         Trial Balance

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